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Indian tribes concerned about state efforts on online poker

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By Chris SierotyLAS VEGAS REVIEW-JOURNAL

American Indian tribes may not benefit from state-regulated online poker laws.

While seemingly everyone at iGaming North America was busy wondering if and when online poker may be legalized on an intrastate basis, tribes expressed concern about the effect state regulation might have on their gaming operations.

"It affects everyone differently," said Sheila Morago, executive director of the Oklahoma Indian Gaming Association. "Tribes are still (hurting) from the loss of revenue from the recession. They are still wary about something new coming down the road."

Moraga said many of the bills would force tribes to renegotiate state compacts, which all have different revenue-sharing structures, she said.

She questioned how a federal bill would affect the 29 states that have tribal gaming.

For example, she said, both Arizona and Oklahoma have compacts covering all tribal gaming, while California has multiple compacts with individual tribes.

"We can all agree that no one wants to open their state compact," Moraga told tribal gaming executives, regulators and state officials at the iGaming North America conference at Planet Hollywood Resort, which concluded Tuesday.

Moraga joined other tribal gaming veterans for a panel discussion of the impact of online gaming policy on tribes. The three-day conference attracted about 550 people from around the world to discuss legalizing online gaming.

California Tribal Business Alliance Chairwoman Leslie Lohse said it would be difficult to get tribes to support new laws involving online gambling unless it was clear how the tribes would be affected.

"We are not just talking about a business impact, but it's a tribal impact," Lohse said.

She added that brick-and-mortar casinos have been very successful in helping tribes rebuild their communities.

Gambling revenue at Native American casinos grew to $26.7 billion in 2010, according to the Indian Gaming Industry Report produced by Casino City Press. That was up 1.3 percent from $26.4 billion in 2009.

Lohse called a proposed online gaming bill a "slap in the face" to California's 110 federally recognized tribes.

The proposed legislation, known as the Internet Gambling Consumer Protection and Public-Private Partnership Act of 2012, would legalize online gaming in California. The measure lays out a price of $30 million for each online gaming license, credited against net gaming revenues for the first three years of operation.

The measure doesn't limit the number of licenses, but does limit applicants to compact tribes, card clubs, horse racing and advance deposit wagers who have done business with the state for three years.

California expects to generate $200 million in the first year, said Stephen Hart, a partner in the law firm Lewis & Roca LLP.

Hart, who represents tribal casinos, said the measure would require tribes to "waive tribal sovereignty" to be licensed in California. He said tribes, which have the exclusivity to operate casinos, will "decline to participate if the waver stands."

California accounts for 25 percent of the Indian gaming market. In 2010, tribes in the Golden State generated $6.78 billion in revenue, down from $7.34 billion in 2008, according to the Indian Gaming Industry Report.

Hart predicted tribes would sue if the measure passes as now written.

Caesars Entertainment Corp. and other large commercial casino companies have been lobbying for federal legislation that would create one law overseeing online gaming and allow states and even tribes to opt in.

Moraga asked what would happen under a federal law if a state opts out and a tribe opts in.

"When you take one federal bill and sort of overlay it over 29 state compacts, you're kind of wondering how it's going to work," Moraga said.

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